The Board of Trade Clearing Corporation, in cooperation with The Bank of New York, is continuing to provide its member firms with better ways to leverage their operating capital through a new collateral management program announced on May 27th. The program, called Joint Collateral Management (JCM), was developed in conjunction with several member firms in order to provide a more automated collateral management process, offer freer access to the funds held as collateral, and ultimately expand the types of securities that are accepted as collateral. As a result, participating members will be able to manage their portfolio of securities more effectively, reducing the amount of margin on deposit and increasing return on assets.

The program is built around The Bank of New York's repo system, called RepoEdge^TM. This fully mature system allows real time access to collateral accounts throughout the trading day, and can also provide automated distribution of funds into margin accounts at the end of the day to ensure that margin requirements are covered. Participating firms will be able to freely trade or exchange their margin securities and avoid margin calls by completing their fund allocation prior to 5PM (as opposed to the current 10AM cut off).

JCM has already been successfully piloted and is now being rolled out to interested firms. If you would like more information regarding this program, please contact Charles McElhenie at (312) 786-5709.